The Centralizing Impulse

Michael Barone has an excellent essay on what the partial dissent in Wal-Mart v Dukes says about how businesses should be run. As someone who practices a lot of class action defense, my main interest in the case* was the procedural aspects, including the point on which the Court was unanimous: you can’t use Rule 23(b)(2)’s mandatory, no-opt-out class action device and “Trial by Formula” for suits seeking individual damages. But Barone focuses on the real fissure that led to the 5-4 split on whether the case presented common, class-wide issues – the fact that Wal-Mart delegates discretion over personnel decisions down to the local store level and holds managers accountable simply for results – and how the dissent’s approach would spell the end of that entire management style. This feeds into one of Barone’s larger points: so much of “progressivism” is, for all its emotional hostility to big business, fundamentally dependent on an economy and society in which decisions are made on a nationwide basis by large, centralized institutions like big corporations, the federal government and large labor unions. Defined-benefit pension plans, nationwide class actions, a massively complex corporate tax code, volumes upon volumes of federal regulations – all these things are spectacularly ill-suited to addressing a decentralized world in which even people connected to large institutions are genuinely empowered at the local level, to say nothing of their poor fit with smaller businesses that lack the economies of scale to cope with byzantine federal regulatory demands, rent-seeking plaintiffs lawyers and long-term pension and health care costs for current employees.

* – Disclaimer: My firm was involved in the case, this post is solely my own opinion, etc.

2 thoughts on “The Centralizing Impulse”

  1. Fallacy of the false alternative — WalMart or the dreaded “civil service.” There are, of course, many options other than these two and government employment is and ought to be subject to different standards than private business.
    Anyone who has had to interact with a government agency can recite tales of woeful and indifferent service. Anyone not seeking only to score political points can also cite examples of talented, dedicated civel servants who could easily meet the WalMart “greeter” standards.
    The class of plaintiffs for which class certification was sought in Dukes was insufficiently constrained and the Court’s decision seems correct. But, the crony capitalists in the GOP and among the right don’t seem to understand that single plaintiff litigation is stacked horribly against that plaintiff. (Also, just because one is represented by a “plaintiff’s lawyer” does not mean that the person does not have a legitimate claim.)
    I favor stricter government regulation over litigation as a more efficient means to achieve justice and, despite the constant crying of small businesses, there is no legitimate reason such entities should not also be expected to follow the law.

  2. “…despite the constant crying of small businesses, there is no legitimate reason such entities should not also be expected to follow the law.”
    Spoken like a plaintiff’s attorney or bureaucrat. Why even consider simplifying the rules so that mere small-business people might be able to comply with them. The nerve of those small-business people, thinking the system should accommodate them.
    For someone who lectures about false alternatives you’re asserting some yourself. Govt regulation and litigation aren’t the only ways to keep people from abusing each other in commercial transactions. Competition works well and has the advantage of leaving everyone better off in the long run. Of course competition has the disadvantage of taking power away from centralized authorities and lawyer-extortionists and we can’t have that.

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